By PHIL GASPER

Phil Gasper is a philosophy professor at Notre Dame de Namur University in California and is on the editorial board of the ISR.

THE MOST influential American Marxist economist of the twentieth century, Paul Sweezy, died in late February 2004, just short of his ninety-fourth birthday. Sweezy co-founded the independent socialist magazine Monthly Review in 1949 and remained its co-editor and guiding influence until his death. His ideas had a powerful impact on the New Left of the 1960s and he inspired a rebirth of interest in Marxist economics in U.S. universities after its virtual disappearance during the McCarthy period. Sweezy’s views also had considerable influence in several third world countries during the 1960s and 1970s.

Sweezy viewed Marxism as a living scientific tradition, not an inflexible body of unchanging doctrine. In an interview a few years ago he described his approach as "revolutionary, non-reformist, non-revisionist–and at the same time non-dogmatic and non-fundamentalist, realizing that Marx didn’t say the last word on everything or even on anything."¹ He wanted to preserve the spirit, not necessarily the letter, of Marx’s writings. Even though many of the conclusions Sweezy drew were sharply at odds with the political tradition with which this magazine is associated, one can still admire his non-doctrinaire attitude and his attempts to develop and apply Marxist theory concretely to understand the contemporary world.

In many respects, Sweezy was an unlikely Marxist. His father was a wealthy New York banker, and he was educated at Exeter and Harvard, where he soon became a star of the ultra-orthodox economics department. But Sweezy was radicalized by the onset of the Great Depression and the rise of fascism. He soon concluded that mainstream economics was incapable of explaining the crisis. He turned first to the ideas of the liberal economist John Maynard Keynes, who argued that government deficit spending was needed to stimulate demand, revive growth, and reduce unemployment.

Sweezy’s first exposure to Marxist ideas came in 1932—1933 when he was a visiting graduate student at the London School of Economics. "When I was first exposed to [Marxism]," he later recalled, "a whole new light fell on a lot of things–not just that there was a crisis of capitalism but that this was part of the downfall of a system." According to Sweezy, the decisive moment in his intellectual development came when he read Leon Trotsky’s recently published History of the Russian Revolution, which he called a "brilliant book."²

But while Sweezy was captivated by Trotsky’s historical analysis, he rejected his political conclusions–in particular the view that the crisis of capitalism could only be permanently ended by an international workers’ revolution. Instead, back in the States, Sweezy became a fellow traveler (though never a member) of the Stalinized Communist Party(CP). He found the CP’s intellectual orthodoxy and rigidity repugnant, but he accepted its conception of socialism as state planning imposed from above. From the beginning, Sweezy’s Marxism was heavily influenced by the Keynesian economic ideas that had initially attracted him. His "socialism from above" perspective was further reinforced by time he spent as an adviser to various New Deal planning agencies in the 1930s.

After finishing his graduate work, Sweezy became an instructor at Harvard, working closely with Joseph Schumpeter, one of the few important bourgeois economists to take Marx’s ideas seriously. The open academic atmosphere that Schumpeter encouraged gave Sweezy the opportunity to work out his own ideas, and in 1942, he published The Theory of Capitalist Development, still one of the clearest introductions to Marxist economics, but which also differed with Marx on one crucial issue.

Marx argued that under capitalism profits derive from the fact that workers are paid less than the value of the output their labor produces. But competition between firms means that the proportion of investment in capital goods tends to rise, and thus the rate of profit (profits compared to total investment) tends to fall. Marx made clear that there were countervailing factors that could temporarily sustain profit rates, such as increasing the rate of exploitation (i.e., lowering wage costs), but in the long run he held that the system would be thrown into crisis because of its inherent contradictions. Sweezy rejected this view, arguing that increases in productivity could lower the cost of the goods needed to sustain the workforce, thus reducing the real cost of labor, raising profits and offsetting the increased capital investment. Marx argued that profits could not be sustained in this way over the long run, but Sweezy concluded that there was no general tendency for profit rates to fall.³

Sweezy worked for military intelligence during the Second World War. At the end of the war, he left academia after being passed over for a tenured position at Harvard because of his radical ideas. He lived on an inheritance from his father, remained active in left-wing politics, and began plans to launch Monthly Review. The journal began publication just as anti-communist repression in the U.S. was reaching its height, and quickly became a leading voice opposing McCarthyism. In 1954, Sweezy was himself investigated for "subversive activity" after lecturing on Marxism at the University of New Hampshire. When he refused to cooperate, he was cited for contempt. Sweezy fought the case to the Supreme Court, which eventually ruled in his favor in 1957.

In the 1950s Monthly Review was a relatively uncritical supporter of Stalinist Russia. Later Sweezy admitted "I should have been…much more perceptive, selective and better informed."⁴ By the 1960s, he was criticizing the Soviet Union as a new form of class society, but he never offered a convincing analysis of what had gone wrong. Instead, he shifted his hopes to Mao’s China, Castro’s Cuba, and other Third World revolutionary movements.

In the early 1950s, he engaged in an important debate with the British Marxist economist Maurice Dobb on the transition from feudalism to capitalism in Western Europe.⁵ Dobb maintained that the breakdown of feudalism was due to internal factors, while Sweezy emphasized the growth of trade, overseas expansion, and the creation of colonies. Both positions were one-sided, but Sweezy’s view had the merit of identifying capitalism as an international system in which more powerful countries attempt to dominate weaker ones economically and militarily. Perhaps it was this perspective that led Sweezy to see the importance of national liberation movements as a challenge to the advanced capitalist powers of the West. It was certainly correct for socialists in the West to support these movements as a blow to their own ruling classes, but Sweezy tended to view them in an uncritical way, without analyzing their class basis.

In fact, by the mid-1960s, Sweezy had explicitly rejected the view that socialism would come about as the result of working class revolution and argued instead that capitalism could only be defeated by the victories of Third World liberation struggles. In his most influential book, Monopoly Capital, co-written with Paul Baran, Sweezy argued that the competitive economy of Marx’s day had given way to a system in which giant monopolies could set their own prices and steadily increase profits by raising productivity. Baran and Sweezy concluded that the tendency of the rate of profit to fall had been replaced by the tendency of the surplus to rise, and that the problem of modern capitalism was how to absorb this surplus. Capitalist crises were thus rooted in the sphere of circulation, rather than–as Marx had argued–the sphere of production, and crisis could be averted by maintaining essentially irrational forms of consumption, such as military spending and mass advertising.

Baran and Sweezy also argued that changes in the structure of capitalism meant that the working class in countries like the U.S. had ceased to be revolutionary.

The only challenge, they concluded, could come from the exploited countries of the Third World.

But this analysis, accepted by many student radicals in the 1960s, has proved mistaken in almost every respect. The rise of giant monopolies did not mean the end of competition, which is today more intense than ever on a global scale. Moreover, at the same time Monopoly Capital was being published (1966), profit rates in the U.S. began to decline as the post-war boom came to an end. While it is true that the industrial proletariat has shrunk, the working class as a whole–white collar as well as blue–is bigger than ever, and has now experienced a thirty-year attack on its living standards. The claim that workers were "bought off" by the system was dubious in the 1960s–only two years after the publication of Monopoly Capital, ten million French workers participated in a general strike that nearly brought down the government–and it is even less plausible today. Finally, Third World liberation struggles have struck temporary blows against Western imperialism, but committed to the project of national development rather than international revolution, they have eventually been subordinated and reintegrated into the global capitalist system. Perhaps the most dramatic example is China, where the state planning that Sweezy so much admired, has given way to a market economy as brutal and exploitative as anything that Marx described in the nineteenth century.

It would be wrong, however, to end on a negative note. In the 1970s and 1980s, Sweezy continued to make important contributions. In particular, he and his Monthly Review co-editor Harry Magdoff analyzed the growing importance of finance capital for the system as a whole. And by the 1990s, Sweezy’s magazine was giving considerable coverage to labor struggles in the U.S. and elsewhere, and building connections to the labor Left. But perhaps the most remarkable fact about Paul Sweezy was that he remained genuinely committed to the socialist transformation of society for over seventy years. That is reason enough to mourn his death.

1 "An Interview with Paul Sweezy," Monthly Review, May 1999, 46.